Emkay Global Financial Services Ltd and Centrum Capital Ltd ("Managers to the Buyback") on behalf of Deccan Chronicle Holdings Ltd ("Target Company") has issued this Public Announcement ("Announcement" or "PA") to the Shareholders / Beneficial Owners of equity shares of the Target Company, pursuant to the provisions of Regulation 8(1) read with Regulation 15(c) of the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998, for the time being in force including any statutory modifications and amendments from time to time ("Buy-back Regulations") and contains the disclosures as specified in Schedule II to the Buy-back Regulations.
Emkay Global Financial Services Ltd and Centrum Capital Ltd, vide a joint letter dated February 03, 2009 filed an application seeking exemption under Regulation 4(2) read with Regulation 3(1)(I) of Securities and Exchange Board of India (substantial acquisition of shares and takeovers) Regulations, 1997 ("Takeover Code") on behalf of Mr. T Venkattram Reddy, Mr. T Vinayak Ravi Reddy, Mr. P K Iyer and Ms. T Urmila Reddy ("Promoters") who collectively own 63.00% of the equity shares of Target Company. The exemption has been granted by SEBI vide its order dated July 20, 2009 ("Exemption Order")
The Target Company hereby announces the Buy-back of its fully paid-up Equity Shares of face value Rs. 2/- each ("Equity Shares") from the open market through stock exchanges using the electronic trading facilities of National Stock Exchange of India Limited ("NSE") and Bombay Stock Exchange Limited ("BSE") (together "Stock Exchanges") in accordance with the provisions of Sections 77A, 77AA and 77B of the Companies Act, 1956 ("Act") and Buyback Regulations at a price not exceeding Rs. 100/- per Equity Share ("Maximum Offer Price") payable in cash, for an aggregate amount not exceeding Rs. 18,000 lakhs ("Maximum Offer Size") from the existing owners of Equity Shares, other than those who are the Promoters holding Equity Shares of the Company ("Buy-back"). The Maximum Offer Size represents 18.64% of the aggregate of the Company’s total paid-up equity capital and free reserves as on March 31, 2008 (the date of latest standalone audited accounts as on the date of Board meeting approving the Buy-back i.e. December 16, 2008).
The Company proposes to Buy-back its fully paid-up Equity Shares of face value of Rs. 2/-each upto 3,50,00,000 Equity Shares ("Maximum Offer Shares") such that the Promoters’ holding shall not exceed 73.51% of the paidup capital of the Company post Buy-back and minimum of 1,00,00,000 Equity Shares ("Minimum Offer Shares") at a price not exceeding Rs. 100/- per Equity Share payable in cash for an amount of upto Rs. 18,000 lakhs.
The Maximum Offer Price has been arrived at after considering certain parameters such as, book value, earning trends in recent past, future outlook for the industry, average price earnings multiples in market and possible impact on earnings per share, industry scenario and impact on other financial parameters due to Buy-back. The Buy-back of Equity Shares will be made at a Maximum Offer Price of Rs. 100/- per share which represents a premium of 80.51% to the closing price on BSE and NSE i.e. Rs. 55.40, on trading day on the date of the Board Meeting i.e. December 16, 2008. The Maximum Offer Price of Rs. 100/- per share offers a premium approximately 153.16% and 152.84% to the closing price on BSE i.e. Rs. 39.50 and NSE i.e. Rs. 39.55, respectively, on date of passing the special resolution by approval of shareholders through postal ballot i.e. January 27, 2009.
The actual number of Equity Shares bought back would depend upon the average price paid for the Equity Shares bought back and the amount deployed in Buy-back in accordance with resolution passed by the shareholders of the Company on January 27, 2009.
Schedule of activities:
Board meeting approving the Buy-back – December 16, 2008
Approval of shareholders of the Company for Buy-back, through postal ballot – January 27, 2009
Date of commencement of the Buy-back – August 12, 2009
Acceptance of Equity Shares – Within relevant payout dates of the Stock Exchanges
Verification of Equity Shares accepted in physical mode – Within 7 days of relevant payout date
Extinguishment of Equity Shares bought back – Within 7 days of acceptance or verification of Equity Shares as mentioned above.
Last date for completion of Buy-back – January 25, 2010 (i.e. 12 months from the date of passing special resolution). However, the Board in its absolute discretion may decide
to close the Buy-back at an earlier date in the event of Minimum Offer Shares being purchased under Buy-back, even if the Maximum Offer Size has not been reached or the Maximum Offer Shares have not been bought back, by giving appropriate notice of such date and completing all formalities in this regard as per relevant laws and regulations. There would be a completion of all payment obligations in respect of Buy-back within the last date of Buy-back. The Board will close the Buy-back at an earlier date if the amount utilised in the Buy back is equal to Maximum Offer Size.
